Suze Orman Thinks Parents Are Making a Mistake That Puts Their Futures at Risk

If you're a parent, you should read this.

Parents face many financial obligations as a result of having children. This can range from paying for food and clothing for 18 or more years to covering the cost of education or even helping kids pay rent or get a mortgage to buy their first home.

While providing for your kids is rightly a top priority after parents choose to bring children into the world, financial expert Suze Orman believes many parents are making a huge mistake when it comes to their own finances if they prioritize their kids when making financial choices.

She's warned that waiting until children leave home to make your own security a top priority could end up backfiring and causing lots of problems. And these problems could harm both the parents and the very children they were trying to provide for.

Here's Suze Orman's warning for parents

According to Orman, many parents "tell themselves that once the kids are grown and out of the house, they will double down on getting ready for retirement." But, unfortunately they fail to follow through on this strategy or they shift their focus too late and it becomes really difficult to save enough in an investment account for a secure retirement.

Orman pointed to a study from the Center for Retirement Research that supports her position. After referencing the data from the study showing that most parents don't improve their financial picture once kids are grown, she went on to warn, "Parents that think they will get ahead on building financial security once the kids are grown, don't seem able to pull that off."

Instead of delaying retirement savings or other financial goals and potentially creating serious problems later, she said her "heartfelt advice" is not to wait but instead to begin working on their own goals ASAP. This includes taking steps such as saving for retirement, choosing an affordable school, buying an inexpensive car, and saving for a home.

Orman believes this strategy will work out better for both parents and children. That's because it won't become too late for parents to build the nest egg they need for their future if they focus on it throughout their lives rather than waiting until their kids are grown. And if parents have the money they need to support themselves later in life, then they won't end up having to turn to their grown children for support.

Should you listen to Orman?

Orman's warning to parents is one that everyone should heed. It's important to remember that kids have plenty of time to develop their own financial life and to recover if they must take on debt. Those who are in middle age or near retirement, on the other hand, are running short of time for compound interest to work for them. And they can't bet on being able to work forever to make up for having no nest egg. They also can't borrow their way through retirement.

Of course, it is important to find a balance because no parent is going to leave their kids to struggle while focusing on themselves alone. By looking at the big picture, avoiding waste, and clearly defining different individual and family goals, parents can hopefully find a way to help their kids get a good start on life without jeopardizing their own future financial security in the process.